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Going Beyond The Statistics: A Look At The $PHYS Premium

 September 23, 2010 12:02 PM

The other day on Chart.ly I tweeted a chart of $GLD vs. $PHYS showing how $PHYS is trading at a historically low premium to $GLD.

Also recently @Xiphos_Trading noticed the same thing.

If you're not familiar with $PHYS it's Sprott Physical Gold Trust, a Canadian closed end fund that invests in gold buillion (and unlike $GLD allows you to take delivery).  While I am not a gold bug, I do like to look at correlated assets for long-short opportunities.  Here's the deal on $PHYS:

It's trading at a 3.31% premium to NAV.  While $PHYS has only been trading since February, this is historically low:

My guess was that $GLD is probably a good proxy for NAV of $PHYS since it is liquid and runs with gold.  I ran the same analysis above on $PHYS vs.


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Rich
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